In an effort to explore new highly resistive soft magnetic materials, Fe/SiO2 nanocomposite materials have been synthesized using a wet chemical reaction approach in which the precursor complex was annealed at various temperatures. The crystallographic structure, nanostructure, morphology, and magnetic properties of the synthetic Fe/SiO2 particles were studied by x-ray diffraction, transmission electron microscopy, and magnetic measurements. The experimental results show that for this approach, the [.alpha]-Fe particles are coated with amorphous silica. The progress of the reaction, the purity of Fe/SiO2 in the synthetic powder, and the Fe particle size are highly dependent on the annealing temperature. By adjusting the annealing temperature, the particle size can be controlled from approximately 20 nm to 70 nm. For the synthetic nanopowder obtained by H2 reduction at 400 °C, there exists a superparamagnetic behavior below room temperature; while for the nanopowders obtained by reduction at higher temperatures, the ferromagnetic behavior is dominant. Based on these studies, optimum synthesis conditions for Fe/SiO2 nanocomposites is determined.